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SHE Transmission
Proposed Key Performance Indicators
November 2013
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 2
Scottish Hydro Electric Transmission plc (SHE
Transmission) is the owner of the high voltage
electricity transmission system in the north of
Scotland. As the regional monopoly provider for this
activity, SHE Transmission is regulated by the Office
of Gas and Electricity Markets (Ofgem) through a
„price control‟. Amongst other things, this determines
the amount of revenue SHE Transmission is able to
earn from users of the network to cover the efficient
cost of maintaining and developing the transmission
system.
As part of the arrangements for the RIIO-T1 price
control that runs from 1 April 2013 to 31 March 2021,
we have agreed with Ofgem to develop and
implement Key Performance Indicators (KPIs) to
assist our customers and other stakeholders,
including Ofgem, understand and monitor the quality
of service we provide. Our performance against these
measures will result in us being either rewarded or
penalised as described further below.
Further information on our Business Plan for this
period can be found at:
www.ssepd.co.uk/Projects/TransmissionPriceControlReview
Alternatively, information is available from Ofgem at:
www.ofgem.gov.uk/Networks/Trans/PriceControls/RIIO-
T1/ConRes/Pages/ConRes.aspx
This paper sets out the detail of the KPIs that we are
submitting to Ofgem in accordance with paragraph of
3D.18 of our Special Licence Conditions. Unless
Ofgem directs otherwise, we will implement these with
effect from 28 May 2013, backdating where possible
for performance in April and May 2013, and report on
our performance against these measures on an
annual basis.
Stakeholder Satisfaction Incentive
In developing our Business Plan, we recognised the
importance of our activities to a wide range of
interested parties who are affected by our activities.
Over the last two years, we have worked with Ofgem
and the other Transmission Owners (TOs) to develop
the detail of an incentive to reward or penalise us for
the quality of the service we offer, and the subsequent
level of satisfaction for those we work with.
Due to industry governance arrangements,
contractual arrangements for those who use or wish to
use our network are made via National Grid as the
System Operator. To reflect this, the incentive was
renamed Stakeholder Satisfaction, although in reality
it covers all parties affected by our activities;
customers and other stakeholders.
The overall incentive package is calculated as a
percentage of our annual allowed revenue and is set
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 3
at 1% of our revenue. There are many factors that
influence our revenue but we estimate that this
incentive is worth between £2million and £4million per
year. This incentive can either be applied as a
penalty if we under-perform or as a reward if we
deliver.
The incentive consists of three components, namely:
An annual Satisfaction Survey;
Annual performance against Key
Performance Indicators; and
External Assurance.
Satisfaction Survey
Once a year, we are required to carry out a survey to
assess how satisfied those affected by or interested in
our activities are with our performance. We will ask
respondents to rate their overall satisfaction with our
performance, on a scale of 1 to 10.
This question of overall satisfaction will feed directly
into the incentive. However, we envisage using the
survey as an opportunity to ask questions on other
aspects of our performance so we can understand the
factors that lead to the scores we receive and also
seek to address any specific issues or concerns that
may be identified through this process.
Key Performance Indicators
We are required to develop a number of KPIs that will
provide a transparent and objective means for a range
of parties to assess the quality of the service we
provide.
Before we implement these, we are required to submit
our proposed KPIs to Ofgem for approval and this
paper forms the detailed part of that submission.
External Assurance
To ensure we are engaging with our customers and
other stakeholders in line with our stated approach,
we are also required to seek independent confirmation
that we have followed the approach we have
committed to. This independent view is intended to
provide comfort to those who provide feedback on our
activities that we are acting on your comments, even if
it may not be immediately apparent. We believe this
is particularly important as there are times when we
have to balance a number of conflicting opinions or
requests.
Proposed Weightings
Our performance in relation to each of these
components contributes to the level of penalty or
reward we are eligible for each year within the price
control period. Under our licence, we are required to
submit proposed weightings for these components to
Ofgem for approval by 30 April 2013.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 4
As such, we have proposed the following weightings
and are awaiting feedback from Ofgem in relation to
these.
Component Value
Satisfaction Survey 0.3
KPIs 0.6
External Assurance 0.1
Our submission to Ofgem will be available from our
website in due course.
Our Commitments to You
In September 2012, we issued a consultation on the
implementation of a number of components of our
Business Plan and what these might mean for our
customers and other stakeholders. One of these
components was our Draft Charter, entitled „Our
Commitments to You‟.
This consultation can be found at:
www.ssepd.co.uk/Projects/TransmissionPriceControlReview
and an excerpt is provided in Appendix 3.
The Commitments we made were:
(1). We will develop, maintain and operate
our networks safely at all times.
(2). We will seek to provide our customers
and stakeholders with the best possible
service.
(3). We will maintain our commitment to
delivering Value for Money across our
activities.
(4). We will operate in a sustainable
manner, with consideration to the long-
term impact of our activities.
(5). We will build and maintain lasting,
mutually beneficial relationships with
those affected by our activities.
(6). We will work smarter, deploying
innovative solutions where these can
assist us in developing, maintaining and
operating our networks.
(7). We will report regularly on our
performance so you can assess how we
are delivering on these commitments and
our wider obligations.
We received a small number of comments on our
proposals that were largely positive. We anticipate
publishing the final version of this document in June
2013.
Given the support received, we believe it is
appropriate to align our KPIs with these higher-level
commitments to provide objective measures for you to
assess our performance against these commitments.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 5
We have developed what we believe are appropriate
measures to underpin these Commitments and
provide a high degree of transparency around our
operations. However, these are areas where we‟ve
not historically captured data so need to carry out
some further steps to be able to develop meaningful
measures. These are set out below under the sub-
heading „Development Areas‟.
We have explained our thoughts in relation to the
relevant Commitment below and will seek to introduce
new or amended measures to reflect these areas in
line with the review process at the end of this paper in
due course.
Developing our Proposed KPIs
We have given a lot of thought to developing a
meaningful and innovative set of KPIs. Here, we
explain the rationale behind our approach.
Giving the full picture
In developing our proposed KPIs, we identified a small
number of measures that we believe are relevant and
appropriate to those affected by or interested in our
activities, which are incentivised by Ofgem through
other mechanisms within the price control. The
affected KPIs are indicated in table 1 by an asterisk (*)
after the reference number.
We do not believe we should be rewarded or
penalised for our performance in relation to these
measures more than once. However, we do believe
that the set of KPIs is incomplete without them.
We are therefore proposing to report on these
measures on an information only basis to provide a
complete picture of our performance. However, we
intend to exclude these from the calculation of our
measured score that calculates our reward or penalty
for the KPI component of the incentive package to
avoid duplication of other incentives.
Dialogue with the System Operator
As highlighted above, all parties who use or wish to
use our network enter into contractual arrangements
with National Grid as the System Operator (SO) for
Great Britain. The SO then enters into bilateral
agreements to implement these arrangements with us
as the TO.
Consequently, the effectiveness of the relationship
between us and the SO is critical to meeting the
needs of our network users. To reflect this, in
December 2012, Ofgem asked us to ensure we
considered the views of the SO in developing these
KPIs. This was set out in a letter that can be found at:
http://www.ofgem.gov.uk/Networks/Trans/PriceControls/RIIO-
T1/ConRes/Documents1/SPTL_SHETPLC_UpdateLetter%2021_12
_2012.pdf
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 6
We have discussed the development of our KPIs with
representatives of the SO as part of progressing our
proposals. Through this dialogue, two key areas of
concern were identified by the SO where our
performance can have a significant impact on the
service that the SO is able to provide to network
users, namely: (i) coordination and planning of
outages on our network; and (ii) completion of
necessary paperwork to ensure timely offers can be
made to those seeking connection to our network.
Two of our proposed KPIs therefore directly reflect
these concerns in terms of Transmission Network
Outages planned in current year (ref: 1.3) and Timely
Submission of Connection Offers to the SO (ref: 5.1).
Of these, the Timely Submission of Connection Offers
already has an incentive associated with it, whereby
we can be penalised up to 0.5% of our revenue if we
do not deliver in line with our obligation to provide
timely connection offers. We therefore propose to
include it on an information only basis as described
above.
In addition, the SO has suggested some supporting
indicators that we are looking to introduce as part of
our ongoing relationship management arrangements
to provide early warning of issues that might affect
these areas.
We believe it is appropriate to incorporate these
indicators as part of our regular commercial reviews
as our performance in these areas does impact on the
SO‟s performance, as well as on those who use or
seek to use our network.
At this stage, however, we do not believe we need to
incorporate these supporting indicators into our
incentivised KPIs as performance against these
indicators will ultimately be captured by whether or not
we deliver against the two higher-level KPIs. We will
continue to review this with the SO as part of our
regular dialogue.
Development Areas
When we started the process of developing our KPIs,
we identified a wide number of areas in which we saw
potential benefits for measuring and reporting our
performance in. The majority of these we were able
to incorporate into our Commitments and this set of
proposed KPIs. However, there were a few areas
identified where further work will be required to be
able to develop a meaningful measure.
These areas include, for example:
Extent to which we can be considered to be
active in our local community;
Processes and policies changed as a direct
result of customer/stakeholder feedback;
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 7
Timescales for providing responses to non-
general enquiries or business
correspondence;
Steps taken to improve our procurement
practices; and
Demonstrating an enduring approach to our
activities.
Regulation of energy networks has moved to an
„Output‟ basis, focussing on what we deliver, rather
than how we achieve this delivery (sometimes
referred to as „Inputs‟), and we fully support this
approach. We recognise that some of our proposed
KPIs can be seen as Inputs rather than Outputs.
Ultimately, we will look to develop all of our KPIs to
measure outputs from our activities but presently lack
the evidence base in certain areas to introduce
appropriate measures at this stage.
We will continue to review these areas and the steps
required to develop KPIs for future use that are a
meaningful measure of our performance, seeking to
learn from recognised best practice and the feedback
we receive through our annual survey about our
customers‟ and stakeholders‟ priorities.
Our Proposed KPIs
As described above, we have developed our KPIs to
reflect performance against each of Our
Commitments. This section sets out the measures in
relation to Our Commitments and our reasoning for
their adoption. Where additional commentary is
required on the definition or measurement of these
measures, we have provided this in Annex A.
For each measure below, we have identified a target
for our performance and our actual performance will
be compared against each of these targets each year
and the outcomes combined to create an aggregate
performance score between 0 and 100. All of the
measures and the respective performance targets are
summarised in Table 1 on pages 13-14. The
methodology for how we will calculate our aggregate
performance score is provided in Annex B.
1. We will develop, maintain and operate
our networks safely at all times.
This Commitment is at the heart of everything we do.
Safety is our highest priority and we have a
responsibility to take all reasonable steps to ensure
that members of the public, contractors and staff are
not harmed as a consequence of our activities.
We also know that those who use our network depend
on us to provide reliable transmission of electricity and
minimise any times when part of network is
unavailable, on either a planned or unplanned basis.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 8
Our KPIs in relation to this Commitment are proposed
to be:
1.1 Reportable safety incidents for our staff
and contractors and the general public;
1.2* Average duration of interruption per
customer; and
1.3 Transmission network outages planned in
current year.
There have been a number of discussions around
whether or not we should have incentives in place in
relation to safety and which body is best placed to
regulate performance in this area. We maintain our
view that the Health and Safety Executive is uniquely
placed to regulate our safety performance. However,
we recognise the importance of safety to all our
customers and other stakeholders and therefore
believe it is relevant to include it for completeness as
part of a set of measures reflecting our performance.
Our performance in minimising the impact of
interruptions is already incentivised under the price
control package under the Reliability Incentive for
Energy Not Supplied. KPI 1.2 is proposed to be
treated on an information only basis as described
above.
Outages are taken when there is an operational
requirement to switch out parts of the Transmission
Network to carry out work safely or, occasionally, as
the result of a fault on a piece of equipment. We
recognise the impact that outages have on network
users and other network owners/operators.
In conjunction with the SO and Scottish Power
Transmission, we have developed a Network Access
Policy (or NAP) that will seek to further improve the
coordination and planning of outages. However, we
recognise that unplanned outages do occur and these
can be particularly problematic for the SO and
network users. Our final KPI in this area is intended
to drive improvements in minimising unplanned
outages to address these concerns and is intended to
complement the work undertaken in relation to the
NAP.
2. We will seek to provide our customers
and stakeholders with the best possible
service.
As part of the extensive consultation approach we
used to develop our Business Plan, we learnt a lot
about the service you want to see from us when you
have a query or a problem and need to contact us.
Our KPIs in relation to this Commitment are intended
to reflect this. They are:
2.1* Stakeholder satisfaction survey score
(overall);
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 9
2.2 Average working days to acknowledge
written correspondence regarding general
enquiries; and
2.3 Number of complaints received and
percentage resolved within 30 days.
As set out above, our stakeholder satisfaction score
already feeds directly into our stakeholder satisfaction
incentive. KPI 2.1 is proposed to be treated on an
information only basis as described above.
3. We will maintain our commitment to
delivering Value for Money across our
activities.
We appreciate that we are funded through consumers‟
bills and recognise the impact of energy costs on both
domestic and commercial customers. Over the price
control period, we anticipate making up to £4 billion of
capital investment in our network to meet the needs of
users, today and tomorrow.
We believe that our expenditure needs to be efficient
and effective, whilst delivering on the projects we
have committed to. We propose the following KPIs in
relation to this Commitment:
3.1* SHE Transmission overall expenditure
(actual vs allowed, on a rolling basis);
3.2 Major Transmission projects delivered
within year; and
3.3 Other Transmission Projects delivered
within year.
We recognise that there can be variations of the
phasing of spend on large capital programmes
between years and that true value for money is only
achieved by keeping expenditure low whilst achieving
the outcomes we‟ve committed to. We therefore
believe it is appropriate to measure expenditure on an
ongoing basis to ensure that an accurate picture of
our performance is provided.
To increase transparency, we have divided our
projects into two groups. The first group is our Major
Transmission reinforcement projects and includes
those projects funded under specific Ofgem incentives
including Strategic Wider Works (SWW);
Transmission Investment for Renewable Generation
(TIRG); and Transmission Investment Incentives (TII).
Projects within this group tend to be higher profile and
attract interest from a wide range of interested parties.
The second group is our Other Transmission projects
and includes works to develop specific connections to
our network; projects to support these connections
(enabling works) and projects to update existing
assets.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 10
4. We will operate in a sustainable
manner, with consideration to the long-
term impact of our activities.
We are committed to the communities and
environments that make up our network area.
We are keen to reflect this through our KPIs that
underpin this Commitment, namely:
4.1 Site environmental audits carried out;
4.2 Reportable environmental incidents; and
4.3 Number of new trainee posts created.
We recognise that we have the potential to have a
significant impact on the physical environment and we
seek to minimise any environmental incidents through
our processes. However, we believe it is appropriate
to be transparent about how well we are achieving
this. The first two KPIs under this Commitment reflect
the steps we take to proactively manage the risks
associated with our activities and, the rare instances,
when things don‟t go to plan.
Our third KPI in this area reflects the broad view we
take of sustainability and the recognition that our
activities also have enduring economic impacts.
Given the age profile of the industry, we are keen to
take pro-active steps during this price control period to
attract the next generation of technical and
engineering staff into the industry.
5. We will build and maintain lasting,
mutually beneficial relationships with
those affected by our activities.
Our activities affect a wide range of individuals and
organisations and we want to take appropriate steps
to build these relationships, recognising the impact
our performance has on the performance of others.
Our proposed KPIs in relation to this Commitment
reflect some of the parties particularly affected by our
activities, namely the SO, those seeking connection to
our network, our supply chain and our community.
We therefore propose the following measures:
5.1* Timely submission of Connection Offers
to System Operator;
5.2 Approved suppliers located within
licensee area; and
5.3 Volunteering days donated to the
community.
As described above, we are already incentivised
within the price control in relation to providing offers to
the System Operator on the basis that we have
agreed as part of the System Operator –
Transmission Owner Code. However, we recognise
that this element of our activities is of interest to a
wide range of parties and we believe it is appropriate
to include it on an information only basis.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 11
We also recognise the impact of our activities on
those within our supply chain, particularly smaller
players who are likely to be located within our network
area and may encounter different barriers to larger
firms. We obviously cannot act in a manner that is
anti-competitive or would cause us to breach
procurement legislation. However, we believe we can
take steps to open opportunities more widely and
consider the longer term impact of our activities.
All of our employees are granted a day each year that
they can spend working on a community project of
their choice. We believe that this is part of building
mutually beneficial relationships. Uptake varies
between teams but we are keen that all of our staff
have the opportunity to be involved and we are also
discussing joint opportunities with some of our
suppliers. More information on the scheme can be
found at
http://www.sse.com/AboutUs/EmployeeVolunteering/
6. We will work smarter, deploying
innovative solutions where these can
assist us in developing, maintaining and
operating our networks.
We greatly value innovation and recognise that it
ranges from large, multi-party projects under the
Network Innovation Competition (NIC) and similar
schemes to an individual seeing a better way to carry
out a specific task.
Our proposed KPIs in relation to this Commitment
recognise the breadth of innovation that we are
seeking to promote and also our desire to turn
learning from such innovation in business-as-usual
practices promptly, and are as follows:
6.1 Network Innovation funded projects with
two or more external collaborators and/or
research providers;
6.2 Learning from Network Innovation funded
projects established as Business-As-Usual;
and
6.3 Business improvement measures and
innovation put in place.
Network Innovation funded projects are those projects
carried out under the NIC or the Network Innovation
Allowance (NIA). The rules around this funding
require network operators to disseminate learning
from projects and, as such, learning implemented
under KPI 6.2 may come from projects carried out by
other network operators.
Business improvement measures are opportunities
identified outside of the Ofgem Innovation
mechanisms and include members of the team taking
pro-active steps to minimise barriers or identify new
opportunities within the business.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 12
7. We will report regularly on our
performance so you can assess how we
are delivering on these commitments and
our wider obligations.
Your comments to date indicate that you appreciate
the increased transparency on our activities that we
provided in developing our Business Plan. We want
to get annual feedback on how satisfied you are with
and share our performance with you.
We propose a single KPI in relation to this
Commitment, namely:
7.1 Annual performance against Our
Commitments is reported on time, in an
understandable format and covers our key
outputs and obligations.
Reporting our Performance
In order for these KPIs to offer a meaningful insight to
you, we recognise the importance of timely reporting
on our performance. We intend to publish an annual
performance summary covering our performance
against the plans that we set out in our Business Plan
and we believe it is appropriate to include a report on
our performance against our KPIs in this annual
summary.
We operate on the basis of years that run from 1 April
to 31 March. This aligns with the regulatory cycle that
Ofgem work to and our corporate reporting
arrangements. Our reporting will therefore cover this
period and we anticipate issuing this in the following
autumn. So, for example, we expect to publish a
report on our performance for the year April 2013 to
March 2014 in August/September 2014.
Review
Our licence conditions require us to review our KPIs at
least once every two years. Generally, we believe this
is a reasonable time to assess the suitability of our
KPIs and update to reflect any changes in our
business or any feedback from you.
In conducting these reviews, we will seek feedback
from you, our customers and other stakeholders, to
understand your thoughts on the latest version of our
KPIs and also provide information on any proposed
modifications.
As set out above, we will also seek to further explore
the development areas we have already identified to
further improve the KPIs on an ongoing basis.
In the first instance, we anticipate reviewing our KPIs
in the summer/autumn of 2014. Whilst we will only
have one complete year of data at this stage, we are
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators
Page 13
conscious that we have been limited in the
consultation we have been able to carry out in
developing these proposals and are keen to seek your
views on our initial set of KPIs, as well as how these
can be further developed or enhanced.
Stakeholder Satisfaction Incentive
Table 1: Proposed Key Performance Indicators – A Summary
Page 14
Ref SHE Transmission Commitment and associated KPIs Measure Target
1 We will develop, maintain and operate our networks safely at all times.
1.1 Reportable safety incidents for our staff and contractors and the general public TRIR : Number 0.55 : 0
1.2* Average duration of interruption per customer Minutes 8.4
1.3 Transmission network outages planned in current year Number 923
2 We will seek to provide our customers and stakeholders with the best possible service.
2.1* Stakeholder satisfaction survey score (overall) % 70
2.2 Average working days to acknowledge written correspondence regarding general enquiries Days 7
2.3 Number of complaints received and percentage resolved within 30 days Number : % 24 : 100
3 We will maintain our commitment to delivering Value for Money across our activities.
3.1* SHE Transmission overall expenditure (actual vs. allowed, on a rolling basis) £million 303.6
3.2 Major Transmission projects delivered within year Number 1
3.3 Other Transmission projects delivered within year Number 20
4 We will operate in a sustainable manner, with consideration to the long-term impact of our
activities.
4.1 Site environmental audits carried out Number 135
4.2 Reportable environmental incidents Number 0
4.3 Number of new trainee posts created Number 24
Stakeholder Satisfaction Incentive
Table 1 (cont.): Proposed Key Performance Indicators – A Summary
Page 15
5 We will build and maintain lasting, mutually beneficial relationships with those affected by our
activities.
5.1* Timely submission of Connection Offers to System Operator % 100
5.2 Approved suppliers located within licensee area % 25
5.3 Volunteering days donated to the community Days 161
6 We will work smarter, deploying innovative solutions where these can assist us in developing,
maintaining and operating our networks.
6.1 Network Innovation funded projects with two or more external collaborators and/or research providers % 80
6.2 Learning from Network Innovation funded projects adopted as Business As Usual Number 2
6.3 Business improvement measures and innovation put in place Number 18
7 We will report regularly on our performance so you can assess how we are delivering on these
commitments and our wider obligations.
7.1 Annual performance against Our Commitments is reported on time, in an understandable format and
covers our key outputs and obligations.
RAG Green
Annex A
Proposed Key Performance Indicators – Definitions
Page 16
Our Proposed KPIs
As described earlier, we have developed our KPIs to
reflect performance against each of Our
Commitments. This section provides further definition
for these measures, as required.
KPI 1.1 Reportable safety incidents for
our staff and contractors and the general
public
This performance metric will measure the
Total Recordable Injury Rate (TRIR) for both SHE
Transmission staff and our contractors and is an HSE
recognised approach to recording injuries in the
workplace. The target for 2013/14 will be taken as an
average of 0.55 per 100,000 man hours worked based
on both staff and contractor hours over this period.
The TRIR is calculated using the following formula:
TRIR = Number of Recordable Injuries X 100,000 hrs
Hours Worked.
The number of recordable injuries consists of
reportable injuries, lost time incidents and medical
treatment incidents, but exclude road traffic collisions
(RTC's) for the purposes of this incentive.
Hours worked
In addition we will also report on any injuries to
members of the general public and we have set a
target for this of zero.
KPI 1.2 Average duration of interruption
per customer
The metric specified measures the average duration
of an interruption that a customer connected to our
transmission network experiences during the year. It
is calculated by the total duration of interruptions (in
minutes) divided by the total number of our customers
affected. However, the target figure of 8.4 minutes
excludes exceptional events where these have been
notified to and agreed by Ofgem.
KPI 1.3 Transmission network outages
planned in current year
This metric will measure the number of planned
outages against the target specified. The planned
outages will facilitate the necessary project and
maintenance work required on the transmission
network. For the purposes of this target, an outage is
defined as each individual booking agreed with the
System Operator for us to get access to our
transmission network and can range from a single day
to a number of weeks.
We recognise the impact that outages have on
network users and other network owners/operators
and this metric is intended to drive improvements in
minimising unplanned outages and promote
improvements in the coordination and planning of the
outages required.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators – Definitions
Page 17
KPI 2.1 Stakeholder satisfaction survey
score (overall)
This metric will be taken from the findings of the
stakeholder satisfaction survey as described in this
paper and will be our score in relation to overall
stakeholder satisfaction.
KPI 2.2 Average working days to
acknowledge written correspondence
regarding general enquiries
In feedback received from recent stakeholder
consultation we recognise that we need to respond to
enquiries in as short a timescale as practicable.
Therefore we will acknowledge and respond where
possible, within the target set of seven working days
for all general enquiries to SHE Transmission.
KPI 2.3 Number of complaints received
and percentage resolved within 30 days
We have developed a new complaints handling
database to monitor the number and type of
complaints received within SHE Transmission. This
will allow us to closely track any complaints received
and ensure that they are satisfactorily closed out as
soon as possible. In addition we have also specified a
target of 30 days to resolve any complaints received.
This will appear as a dual target for this metric
alongside the target for the number of complaints
received. However, only the first part of the scores
(i.e. the relationship between the target number of
complaints and the actual complaints received will
feed into the score).
KPI 3.1 SHE Transmission overall
expenditure
We will calculate our overall expenditure as our total
capex plus total opex approved by Ofgem for the year
in nominal prices, excluding depreciation and rates.
To assist stakeholders to assess our performance in
totality, we will include our allowance for projects
funded under TIRG and therefore this definition does
not match the adopted total expenditure (often
referred to as „totex‟) definition.
We will use the Final Proposals for SHE Transmission
in April 2012 and adjust the baseline allowances for
additional funding agreed through the uncertainty
mechanisms within the price control settlement.
KPI 3.2 Major Transmission projects
delivered within year
This metric will measure how many Major
Transmission projects are delivered in the reporting
year. Theses will include those projects funded under
specific Ofgem incentives which include Strategic
Wider Works (SWW); Transmission Investment for
Renewable Generation (TIRG); and Transmission
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators – Definitions
Page 18
Investment Incentives (TII). Projects within this group
are the higher profile projects such as Beauly – Denny
and Beauly – Mossford which attract interest from a
wide range of interested parties. We define the year
that a project should be delivered in as the year
specified by Ofgem in our licence conditions. Delivery
will mean the primary plant associated with the project
has been commissioned onto the transmission
network in order to achieve our outputs as specified in
our licence.
KPI 3.3 Other Transmission projects
delivered within year
This performance metric will measure how many
Other Transmission projects are delivered in the
reporting year and these include works to develop
specific connections to our network; projects to
support these connections (enabling works) and
projects to update existing assets. We define the year
that a project should be delivered in for these projects
as the year required under our contractual
arrangements with National Grid or as part of our
annual work programme. Delivery will mean the
primary plant associated with the project has been
commissioned onto the transmission network.
KPI 4.1 Site environmental audits carried
out
In order to monitor our sites, environmental audits will
be undertaken by SHE Transmission staff. The target
set will ensure that our high standards, as well as the
trust developed with our stakeholders who provide
consents and have direct responsibilities for the
environment, are maintained.
KPI 4.2 Reportable environmental
incidents
To be transparent on how well we are performing in
relation to environmental incidents, we will measure
and report on the number of reportable incidents that
may occur on our sites. The definition of reportable for
this metric is as per the EA / SEPA Category 2
incident as detailed in the SEPA Compliance Scheme
Assessment Manual (Table 5) namely:
Any lower ranking incident that (any of):
1. gives rise to multiple complaints
2. affects protected species or their habitat
3. releases 100s of litres of oil to land
4. releases 10s of litres of oil to water
5. materially discolours a watercourse type 1
(marked on the 1:50000 OS mapping)
6. arises from a systematic failure of waste
management systems which involves
hazardous or special waste and releases of
SF6
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators – Definitions
Page 19
7. ELC (Environmental Limit Conditions) Gross
Breach as defined in the SEPA Compliance
Scheme Assessment Manual, Table 3
8. ELC repeated minor breach as defined in the
SEPA Compliance Scheme Assessment
Manual, Table 3
9. Planning condition breach giving rise to
multiple complaints
10. Undertaking of a prohibited activity.
These will relate to all incidents that SHE
Transmission is required to report, including our
contractors working on our behalf.
KPI 4.3 Number of new trainee posts
created
This target will highlight the number of new trainee
posts provided during the reporting year and will
include engineering and craft trainees.
KPI 5.1 Timely submission of Connection
Offers to System Operator
This measure will reflect the percentage of offers
provided to the System Operator as per the timings
set out in the System Operator – Transmission Owner
Code (STC).
KPI 5.2 Approved suppliers located within
the licensee area
This metric will provide a percentage of the approved
suppliers that are located within our licensed area,
based on our vendor database, at the end of the
reporting year.
KPI 5.3 Volunteering days donated to the
community
SHE Transmission is actively encouraging its staff to
spend time working on community projects. This KPI
will measure the number of days taken by our staff to
carry out work on approved community projects.
KPI 6.1 Network Innovation funded
projects with two or more external
collaborators and/or research providers
This metric will measure the number of NIA and NIC
projects that SHE Transmission are working on
collaboratively over the year.
KPI 6.2 Learning from Network Innovation
funded projects established as Business-
As-Usual
It is important to turn learning from innovation into
business-as-usual promptly. This measure will record
the number of NIA or NIC projects that have been
adopted within SHE Transmission, including where
learning has been adopted from the projects carried
out by other Network Operators.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators – Definitions
Page 20
KPI 6.3 Business improvement measures
and innovation put in place
This metric will record the number of business
improvement measures and innovation opportunities
(outside Ofgem innovation mechanisms) that SHE
Transmission staff put in place over the course of the
year.
KPI 7.1 Annual performance against Our
Commitments is reported on time, in an
understandable format and covers our
key outputs and obligations
This final metric will report on the RAG assessment of
our timely reporting of our annual performance
summary and the content and format of that summary.
GREEN – summary report is issued to our
stakeholders and placed on our website ahead of
schedule, or on time, and the content reported is of
sufficient detail and format to meet the expectations of
the majority of our stakeholders. We will use our
survey to assess whether we have met our
stakeholders‟ expectations and will consider a score
of six or greater from 50% or more of respondents as
meeting the expectations of the majority of our
stakeholders.
AMBER - summary report is issued to our
stakeholders and placed on our website within twenty
working days of the target but the content reported is
of sufficient detail and format to meet the expectations
of our stakeholders as described under GREEN.
RED - summary report is issued and placed on our
website behind schedule by more than twenty working
days and/or the content reported is not of sufficient
detail and/or format to meet the expectations of our
stakeholders.
Annex B
Proposed Key Transmission KPIs - Methodology
Page 21
Measuring our Performance
These performance measures constitute one of three
components comprising the Stakeholder Satisfaction
Incentive. To support a clear and transparent
calculation of the incentive, our methodology develops
a single “bottom line” figure, which we refer to as the
aggregate performance score, to represent the KPI
component and this is reflected by the term SKPIt-2 in
our licence.
The development of these KPIs has taken into
account a number of factors:
The specific measures and the outputs they
produce for our stakeholders
The performance level target in each area;
based on our stakeholders‟ expectations and
our previous performance in these areas.
The weighting applied to each KPI according
to its importance and
The final rating, which is an aggregate score,
which will determine the incentive for when
we perform well and the penalty when we do
not.
Annex A describes the measures we have chosen
and, while some may be more focussed on inputs
than outputs, we believe they serve as a gauge of
what our stakeholders have come to expect from us.
This annex explains the development of our
performance level targets, our weighting criteria and
our final rating calculation.
Performance Targets
Our performance targets are intended to challenge
ourselves to improve in a continuous manner. SHE
Transmission has long established innovation and
business improvement mechanisms that are driven by
the targets we set ourselves. Balancing the
performance needs of our stakeholders against the
cost to them of delivering that level of service is a
deciding factor on what we aim to achieve.
The table on pages 13 and 14 provides a summary of
the KPI‟s and the proposed targets set for 2013/14.
Percentage Score
The calculated percentage score compares the actual
score against each allocated target which evaluates
the performance of each individual KPI. In addition,
we have also used a RAG status to monitor and drive
continuous improvement for each KPI.
Weighting
The fifteen proposed contributory measures are
divided into two tiers for weighting purposes. This
enables us to bring our stakeholders‟ priorities to the
fore.
Stakeholder Satisfaction Incentive
Proposed Key Performance Indicators – Methodology
Page 22
The two categories are:
1. The first tier of measures are each accorded a
10% weighting of their score. These
measures are selected for their direct impact
on our stakeholders and for their criticality to
our core objectives as described in our
Business Plan.
2. The second tier of measures are each
accorded a 5% weighting of their score.
These are identified as having an indirect or
narrow impact on our stakeholders, or may be
considered as inputs.
We believe that limiting the categories to two,
balances the need to give some factors a higher
profile, whilst ensuring that no single measure has a
negligible influence on our final score. The weightings
of our KPIs are shown in the “worked example” table
on page 22.
Rating
We have proposed to allocate each individual
measure a rating on a scale of 0 to 3 depending on
how they each perform against their targets. The main
advantages of this are that it limits the distorting
influence of any statistical outliers by allocating an
absolute maximum score. Ratings are assigned
according to the percentage banding shown below:
0 Performance is below 49% of target
1 Performance is between 50% and 68% of target
2 Performance is between 69% and 89% of target
3 Performance is above 90% of target and above.
The scores from each of these fifteen contributory
KPI‟s are added together to provide the Aggregate
Performance Score.
Further Explanatory Notes
All contributory KPI items are weighted Tier 1 or
Tier 2
All contributory KPIs with target met or exceeded
will be scored as 3
The total overall score is calculated by adding up
all contributory KPIs scores
The aggregate score % for KPIs is calculated by
dividing the total overall score with the number of
contributory KPIs
RAG scoring is as per the definition section above
Type of calculation Formulae
% score Difference between
Target / Actual or Actual
/ Target
Scoring for every KPI Based on rating
Total overall score Sum of all KPI ratings
Aggregate score % for
KPIs
Total aggregate score /
No. of contributory KPIs
In addition, the spreadsheet that we have developed
to calculate our score has been provided to Ofgem.
Annex B
Proposed Key Transmission KPIs - Methodology
Page 23